The Smart Investor | energy and cheese

Every Sunday we put the spotlight on financial and stock market news that may be useful to the investor but may have stayed under the radar.

Posted at 7:00 am

John Gagnon
special cooperation

After seven months of the stock market decline that began earlier in the year, it is clear that the energy sector has mitigated the decline in the Canadian stock market. So far, the S&P/TSX index is down 7.2%, while the S&P500 is down 13.3% and the NASDAQ is down 20.8%.

In this general decline in markets, only the energy sector of the S&P/TSX shows a significant gain, up 29.7%. The consumer staples and utilities sectors also offered more modest gains of 5.0% and 3.2%, respectively. The other eight sub-indices, including two, healthcare and information technology, fell more than 50%. Shopify, nuvei and Converged technology solutions were the main victims of this investor disinterest in the techno sector.

The share price of Saputo seems to be on the way to a spectacular trend reversal. Between June 2021 and June 2022, the stock was down 40% as supply chain distortions and inflation of inputs like milk severely impacted profit margins. But investors seem to have sensed lately that the situation is changing and that a return to a more benign environment is beginning. The quarterly results released on Thursday, and in particular the words of management, confirmed that investors were right. Here’s what management said: “Despite inflation and supply chain disruptions likely to persist, we expect a significant recovery in earnings in fiscal 2023, driven by the full impact of announced price increases. recently on improved productivity and fixed cost absorption, a return to historical order fill rates and the benefits of our global strategic plan. During Thursday’s trading session, the stock price rose 9%.

It’s been a busy week with the release of quarterly earnings for several Quebec Inc. and those of bomber appeared to please investors as the share price rose more than 10% on Thursday. The free cash flow, which exceeded expectations, and a well-filled order book deserve special mention. The analysts are not lacking in enthusiasm. National Bank Financial’s Cameron Doerksen is raising his target price to $53 from $46, meaning he believes the stock, which hit a 52-week low three weeks ago, could at least double in a year. Desjardins’ Benoit Poirier goes much further and bets his at $82. The business jet maker would be partially immune to a recession as several of its orders face significant penalties if canceled, Cameron Doerksen notes.

Although there was an upward rally in the share price in the week leading up to the quarterly results release Speed ​​of Light While one might have thought the news was good, that doesn’t appear to have been the case, with the e-commerce software maker’s stock down about 13% since Thursday’s announcement. Richard Tse, an analyst at National Bank Financial, reminds that Lightspeed remains a growth stock in the early stages of its development and that the company is gaining market share. Management states that for the three-month period ended June 30, sales increased by 50%.

In the house of Quebecor, which is also targeting an uptrend, profits rose in the most recent quarter but sales fell. The company is awaiting a decision on whether to accept its bid to acquire Freedom Mobile, which would allow it to continue its growth at the Canadian level, according to its President Pierre Karl Peladeau.

The recent results of Lion Electric Company shows that it continues to struggle with supply chain distortions. Deliveries on the 2nde Quarter totaled 105 vehicles, including 90 school buses and 15 trucks. In an analysis, Desjardins had forecast deliveries of 126 vehicles, or 20% more. The company reports adjusted losses before interest, taxes, depreciation and amortization of 14.4 million while expectations were around 10-11 million.

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